Legal Definitions - doubling

Doubling in bankruptcy refers to the legal right of a married couple, when filing for bankruptcy jointly, to each claim their own set of property exemptions. This means that instead of a single exemption amount applying to their shared assets, each spouse can claim the full exemption amount for themselves. Essentially, they can "double" the total value of assets they are allowed to protect from creditors. This principle is rooted in federal law, which states that exemptions apply separately to each debtor in a joint bankruptcy case.

This right is significant because it allows married couples to protect a greater portion of their assets. In a Chapter 7 bankruptcy, it means they can keep more of their property rather than having it sold to pay debts. In a Chapter 13 bankruptcy, it can reduce the amount they are required to pay back to unsecured creditors through their repayment plan.

• Example 1: Household Goods

  Imagine a state's bankruptcy law allows an individual to exempt up to $5,000 worth of household goods (like furniture, appliances, and electronics). The Millers, a married couple, jointly own household goods valued at $9,000. If only one spouse filed for bankruptcy, they could only exempt $5,000, leaving $4,000 potentially subject to creditors. However, because they are filing jointly, the principle of doubling allows each spouse to claim the $5,000 exemption. This means their combined exemption is $10,000 ($5,000 for Mrs. Miller + $5,000 for Mr. Miller), which is more than enough to cover the full $9,000 value of their household goods, protecting all of it.

• Example 2: Bank Account Funds

  Consider a scenario where state law permits an individual to exempt up to $1,500 in a bank account. The Johnsons, a married couple, have a joint savings account containing $2,800. If only one spouse were to file, they could exempt $1,500, leaving $1,300 potentially exposed to creditors. Through doubling, each spouse can claim the $1,500 exemption. This results in a total exemption of $3,000 ($1,500 for Mrs. Johnson + $1,500 for Mr. Johnson), allowing them to fully protect the entire $2,800 in their joint savings account.

• Example 3: Tools of a Trade

  Suppose a state offers an exemption of $2,000 for tools of a trade. The Chengs, a married couple, both work as freelance photographers and jointly own camera equipment and editing software valued at $3,500, which are essential for their business. If only one spouse filed for bankruptcy, they could exempt $2,000, leaving $1,500 of their professional equipment unprotected. With doubling, each spouse can claim the $2,000 exemption. Their combined exemption becomes $4,000 ($2,000 for Mrs. Cheng + $2,000 for Mr. Cheng), ensuring that the full $3,500 value of their photography equipment is protected, allowing them to continue their livelihood.